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Convention Center Update Presented

OCEAN CITY- With the first phase of the expansion of the Roland E. Powell Convention Center already underway, town officials this week got a briefing on the current project and the future of the facility.

Convention Center Director Rick Hamilton on Tuesday presented the Mayor and City Council with a brief history of the convention centers expansion and where it is going. Previous goals were to create 20,000 square feet of new exhibit space, maintain a 20,000 square-foot exhibit area on the second level, add a 1,200 fixed-seat auditorium, and to capture the bay view from the convention center.

Currently, the convention center is under construction expanding the ballroom and Exhibit Hall D. The 32,000-square-foot expansion is estimated to be completed by fall of next year at a cost of $9.3 million. The town has contributed $5 million, and the Maryland Stadium Authority (MSA) contributed $4.3 million. To date the current construction is on time and on budget. The estimated new tax revenue to the state is $1.1 to $1.6 million on an annual basis. The convention center provides and will provide 300 to 400 full-time jobs.

“We will still use the same staff that is currently at the convention center,” Hamilton explained. “We will not be expanding the staff whatsoever. We should still have the same operational expenses that we have had in the past and maybe somewhat reduced with the high efficiency air conditioning and heating systems that we are going to construct.”

The beautification committee has created a Reflections of Life Tree in the lobby of the convention center. Leaves to the tree are sold to recognize individuals in the community and in memory of people who have fallen or passed.

“They are donating the funding from the Reflections of Life Tree for new fountains on our bay that will be visible outside of our new ballroom and exhibit hall downstairs, which I think is going to be a very nice plus,” Hamilton said.

Since the council has approved phase one of the convention center’s construction, Hamilton said clients and potential clients have been contacted about their needs when it comes to using the convention center space. Clients desire a formal assembly space for opening and closing sessions; cheer, dance, and gymnastics groups desire a theatrical setting for competitions, and the community desires a venue for arts and entertainment to extend stay of visitors.

“We have spent a great deal of time visiting other facilities in the area looking at things that we thought are needed within the community,” Hamilton said.

In meeting the needs expressed by clients, Hamilton said the auditorium will have to include a fixedtiered seating, proscenium stage, fly gallery, dressing rooms, loading dock, ticket office, concessions, and an exterior entrance, of which most are already provided. The key benefit to providing the proposed auditorium in the convention center is meeting existing client’s expanding needs, increasing competitiveness in the marketplace, increasing exhibition space during assemblies, giving the community a focal point for entertainment and the arts, and extending stay of visitors to attend events.

Hamilton provided a calendar of entertainment that the auditorium and new convention center could draw to Ocean City that included traveling Broadway shows such as Cats and Les Miserables. Other events were Cirque Ziva, which is a smaller version Circus de Sole, the Magic of the Masters illusion show.

City Engineer Terry McGean presented the Mayor and City Council with three goals as the convention center’s renovation moves forward. The first goal is to continue the MSA partnership with the convention center. Currently the MSA pays a 50-percent share of operating costs, or about $1.5 million a year. The partnership is scheduled to end by the time MSA pays off their part of the expansion by 2014. So McGean requested an extension of the partnership with MSA, including the operating deficit share, through 2034, or a period for auditorium bonds.

The second goal is to keep in place the funding mechanism for future capital projects paid for through the food tax revenue. McGean requested to change to food tax legislation to limit the outstanding total, instead of maximum, principal amount of the bonds issued to be $20 million. This will allow for food tax to continue to be collected and used for improvements, additions, and repairs to the building as bonds are paid off.

The final goal McGean presented was to proceed with phase II of the auditorium. If the partnership with MSA is extended and food tax change is approved, the city share of the auditorium can be funded with no additional revenue and food tax at current half percent, and based on an economic study done by MSA they are proposing their share be 25 percent of construction cost for the auditorium and 50 percent of operating deficit for the full building.

The total auditorium project budget comes to $14 million. The cost estimate includes fly galleries, loft grids, and catwalks that total $1 million of the cost.

“This is the difference between having a high school stage and having a real stage,” Mcgean said. “These are structural elements that have to be done while the stage is being constructed.”

Councilman Joe Hall expressed a few concerns. He said the proposal as it stands today exceeds the original proposal. His two issues were that he did not expect a $14 million price tag and he also didn’t expect that MSA was going to decrease their contribution to the project.

“Before we endorse this, I hope that we go back to the table to try to get the state to participate on the same level that they have traditionally participated,” he said.

Mayor Rick Meehan said in the beginning the town didn’t know if they had support from the MSA. He added that renovations to the convention center in the past had increased the buildings revenue followed by an economic study that proved the convention provided means for the MSA to become the convention centers partner.

“We went from not having any participation…and now up to 25 percent of participation but we are going to continue to ask for 50 percent of the operating budget,” he said. “So, I think we have come a long way there, and we have done it as result of changing the ways we were doing things and re-allocating some of that space and looking at a way of making this a more flexible type of building.”

Before MSA representatives spoke to the Mayor and City Council, Council President Jim Hall said he was not expecting the council to vote on the requests made that day. He added that it needed to be set into the schedule as a public hearing and a further discussion as soon as possible.

“I am very impressed and very enthusiastic about it but I would like to speak with members of the legislature and the MSA a little more,” he said. “I think this is a doable deal and if not see it in a unanimous votes an almost unanimous vote.”

Project Executive of MSA, Gary McGuigan, said that since their partnership with Ocean City began in 1995 with a $32 million renovation of the convention center, legislature requires for them to report back on the economic impact of the original expansion on the state. From studies, McGuigan stated that the convention center is a significant asset to the state as well as Ocean City.

“I think that the state is in favor of stadium investment in the convention center is shown to be a good investment,” said MSA Executive Director Michael Frenz.

As the discussion came to an end, Jim Hall was sure to point out that the taxpayers of Ocean City will not be affected by the costs of phase two construction on the convention center.

“This is really paid mostly by tourists and visitors and that certainly makes it more palatable for us,’ he said. “This is a good project, well designed, well thought out, and I hope we have a great public hearing.”

The council voted unanimously to move the discussion to a Monday night public hearing.